ZEELAND, MI--(Marketwire - October 21, 2009) - Gentex Corporation (
NASDAQ:
GNTX), the Zeeland,
Michigan-based manufacturer of automatic-dimming rearview mirrors and
commercial fire protection products, today reported results for the third
quarter and nine months ended September 30, 2009.
For the third quarter of 2009, the Company's net sales increased by two
percent to $155.7 million compared with $153.1 million in the third quarter
of 2008. The gross profit margin increased on a year-over-year basis from
30.5 percent in the third quarter of 2008 to 34.9 percent in the third
quarter of 2009, primarily due to purchasing cost reductions, reduced fixed
overhead costs, and improved product mix, partially offset by the impact of
annual customer price reductions.
The Company's net sales increased by 33 percent on a sequential,
quarter-to-quarter basis, from $117.3 million in the second quarter of 2009
to $155.7 million in the third quarter of 2009. The gross profit margin of
34.9 percent in the third quarter of 2009 increased sequentially from 30.5
percent in the second quarter of 2009. The sequential increase in the
gross margin was primarily due to the Company's increased ability to
leverage fixed overhead costs due to the 33 percent increase in net sales.
For the first nine months of 2009, the Company's net sales were $366.9
million compared with $501.5 million for the first nine months of 2008.
The gross profit margin was 30.7 percent for the first nine months of 2009
compared with 33.6 percent for the first nine months of 2008, primarily due
to the Company's inability to leverage fixed overhead costs. Annual
customer price reductions were offset by purchasing cost reductions.
Income from operations increased by 42 percent in the third quarter of 2009
to $33.1 million, compared with $23.3 million in the third quarter of 2008.
The increase in operating income was primarily due to the increase in the
gross margin quarter over quarter. Income from operations declined by 48
percent for the first nine months of 2009 compared with the same prior-year
period. The decline in operating income during the first nine months of
2009 was primarily due to the decline in the gross margin.
Other income was $2.5 million in the third quarter of 2009 compared with
other expense of $566,000 in the third quarter last year, primarily due to
realized gains on the sale of equity investments, partially offset by lower
investment income due to lower interest rates. Other income was $118,000
for the nine months ended September 30, 2009, compared with $9.1 million
for the nine months ended September 30, 2008, primarily due to lower
investment income due to lower interest rates.
Net income increased by 58 percent to $23.9 million in the third quarter of
2009 compared with $15.1 million in the third quarter of 2008, primarily
due to increased operating income. For the first nine months of 2009, net
income declined by 52 percent to $34.6 million compared with the same
nine-month period in 2008, primarily due to the decreased operating income
and other income. Earnings per diluted share was 17 cents in the third
quarter of 2009 compared with earnings per diluted share of 11 cents in the
third quarter of 2008. Earnings per diluted share was 25 cents for the
first nine months of 2009 compared with earnings per diluted share of 51
cents during the first nine months of 2008.
"We are pleased to report this good performance by Gentex in the third
quarter," said Gentex Chairman of the Board and Chief Executive Officer
Fred Bauer. "The Company continues to benefit from additional vehicle
models offering our SmartBeam® and Rear Camera Display products, and
we're optimistic that those products will continue to drive our future
growth," said Bauer.
SmartBeam is the Company's proprietary high beam headlamp assist system.
The Rear Camera Display Mirrors display high-resolution, color images of
what is directly behind the vehicle via an automaker-specified camera.
Share Repurchase Plan
During the third quarter, the Company did not repurchase any shares. The
Company has a share repurchase plan in place with authorization to
repurchase up to 28 million shares of the Company's common stock. To date,
including the prior share repurchases, the Company has repurchased
approximately 26 million shares, leaving approximately two million shares
authorized to be repurchased under the plan.
Unit Shipments and Net sales
Total auto-dimming mirror unit shipments decreased by 7 percent in the
third quarter of 2009 compared with the third quarter last year.
Automotive net sales increased by 3 percent from $147.3 million in the
third quarter of 2008 to $151.1 million in the third quarter of 2009.
Total auto-dimming mirror unit shipments decreased by 31 percent for the
first nine months of 2009 compared with the first nine months of 2008.
Automotive net sales decreased by 27 percent from $484.2 million in the
first nine months of 2008 to $352.2 million for the first nine months of
2009.
Automatic-dimming mirror unit shipments in North America decreased by four
percent in the third quarter of 2009 compared with the same period in 2008,
primarily as a result of lower light vehicle production. North American
light vehicle production declined by 20 percent in the third quarter of
2009 compared with the same prior-year period.
Automatic-dimming mirror unit shipments in North America decreased by 39
percent for the first nine months of calendar year 2009 compared with the
first nine months of calendar year 2008, primarily as a result of lower
light vehicle production. North American light vehicle production declined
by 41 percent for the first nine months of 2009 compared with the same
prior-year period.
Automatic-dimming mirror unit shipments to offshore customers decreased by
eight percent in the third quarter of 2009 compared with the same period
last year, primarily due to lower light vehicle production in Asia and
Europe. Light vehicle production in Europe decreased by 14 percent in the
third quarter of 2009, and decreased by 19 percent in Japan and Korea in
the third quarter of 2009, compared with the same period last year.
Automatic-dimming mirror unit shipments to offshore customers decreased by
26 percent for the first nine months of 2009 compared with the same period
last year, primarily due to lower light vehicle production in Asia and
Europe. Light vehicle production in Europe decreased by 29 percent in the
first nine months of 2009, and decreased by 33 percent in Japan and Korea
in the first nine months of 2009, compared with the same period last year.
Fire Protection net sales decreased by 19 percent to $4.5 million for the
third quarter of 2009 compared with the same period last year, and declined
by 16 percent for the first nine months of 2009 to $14.5 million compared
with the same prior-year period. The decline in net sales in both periods
was primarily due to the weak commercial construction market.
Future Estimates
Gentex Senior Vice President Enoch Jen provided certain guidance for the
fourth quarter of 2009.
"Based on CSM Worldwide's end-of-September light vehicle production
forecast for the fourth quarter of 2009, we currently expect our net sales
in the fourth quarter of 2009 to increase by 30-35 percent compared with
the fourth quarter of 2008," said Jen.
"While our production volumes have improved as automakers work to build
inventories, it continues to be a difficult operating environment as we now
work to fully staff production areas that had been producing significantly
lower volumes," said Jen. "In the short run, this situation requires us to
operate with more overtime to meet the higher production schedules. In the
long run, we are cautiously optimistic that we may have seen the trough in
this cycle earlier this year," said Jen. "And, while we are quite pleased
with the results that we posted in the third quarter, we still believe that
there will be some schedule adjustments as automakers work to balance their
inventories with vehicle sales levels."
Jen said that he believes that the global governmental vehicle stimulus
programs, such as the "Cash for Clunkers" program in the United States, did
not have a significant direct effect on the Company's production levels in
the third quarter of 2009, since the smaller vehicles that people were
mostly purchasing were those that typically did not contain significant
Gentex content. However, he said that the Company believes that there was
some indirect effect due to the increased showroom traffic that those
programs created.
"While the governmental stimulus programs were in effect, automotive
vehicle sales were temporarily higher than automotive production levels,"
said Jen. "Now that sales have decreased and the scenario has reversed,
automakers, at some point, will need to adjust their production plans for
the lower sales levels."
The Company's current fourth quarter 2009 forecast is based on CSM's
end-of-September forecast for light vehicle production of 2.7 million units
for North America, 4.3 million units for Europe and 2.9 million units for
Japan and Korea for the fourth quarter of 2009. CSM's current calendar
year 2009 forecast for production in North America is a 32 percent decline
to 8.6 million light vehicle units; a 21 percent decline to 16.1 million
units for Europe, and a 28 percent decline to 10.4 million units for Japan
and Korea, when compared with 2008.
Based on the Company's expected net sales for the fourth quarter of 2009,
Jen said that the Company expects its gross profit margin for the fourth
quarter to be approximately in the same range as the gross profit margin in
third quarter of 2009.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act, as amended, that are based on management's
belief, assumptions, current expectations, estimates and projections about
the global automotive industry, the economy, the ability to control and
leverage fixed manufacturing overhead costs, unit shipment and revenue
growth rates, the ability to control E,R&D and S,G&A expenses, gross
margins, and the Company itself. Words like "anticipates," "believes,"
"confident," "estimates," "expects," "forecast," "hopes," "likely,"
"plans," "projects," "optimistic," and "should," and variations of such
words and similar expressions identify forward-looking statements. These
statements do not guarantee future performance and involve certain risks,
uncertainties, and assumptions that are difficult to predict with regard to
timing, expense, likelihood and degree of occurrence. These risks include,
without limitation, employment and general economic conditions, worldwide
automotive production, the maintenance of the Company's market share, the
ability to achieve purchasing cost reductions, competitive pricing
pressures, currency fluctuations, interest rates, equity prices, the
financial strength/stability of the Company's customers (including their
Tier 1 suppliers), supply chain disruptions, potential sale of OEM business
segments or suppliers, potential customer (including their Tier 1
suppliers) bankruptcies, the mix of products purchased by customers, the
ability to continue to make product innovations, the success of certain
products (e.g. SmartBeam® and Rear Camera Display Mirror), and other
risks identified in the Company's other filings with the Securities and
Exchange Commission. Therefore, actual results and outcomes may materially
differ from what is expressed or forecasted. Furthermore, the Company
undertakes no obligation to update, amend, or clarify forward-looking
statements, whether as a result of new information, future events, or
otherwise.
Third Quarter Conference Call
A conference call related to this news release will be simulcast live on
the Internet beginning at 10:30 a.m. EDT today. To access that call, go to
www.gentex.com and select the "Audio Webcast" icon in the lower right-hand
corner of the page. Other conference calls hosted by the Company will also
be available at that site in the future.
About the Company
Founded in 1974, Gentex Corporation (
NASDAQ:
GNTX) is an international
company that provides high-quality products to the worldwide automotive
industry and North American fire protection market. Based in Zeeland,
Michigan, the Company develops, manufactures and markets interior and
exterior automatic-dimming automotive rearview mirrors that utilize
proprietary electrochromic technology to dim in proportion to the amount of
headlight glare from trailing vehicle headlamps. More than half of the
Company's automatic-dimming interior mirrors are sold with advanced
electronic features. Approximately 96 percent of the Company's net sales
are derived from the sales of auto-dimming mirrors to nearly every major
automaker in the world.
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
------------- -------------- ------------- -------------
Net Sales $ 155,741,847 $ 153,056,570 $ 366,915,101 $ 501,518,401
Cost of Goods
Sold 101,386,005 106,359,938 254,454,384 333,094,524
------------- -------------- ------------- -------------
Gross Profit 54,355,842 46,696,632 112,460,717 168,423,877
Engineering,
Research &
Development 11,955,915 13,101,431 34,557,839 39,236,174
Selling,
General &
Administrative 9,296,514 10,324,190 26,522,075 30,139,806
------------- -------------- ------------- -------------
Income from
Operations 33,103,413 23,271,011 51,380,803 99,047,897
Other (Income)
Expense (2,478,993) 566,184 (117,616) (9,139,607)
------------- -------------- ------------- -------------
Income Before
Provision
for Income
Taxes 35,582,406 22,704,827 51,498,419 108,187,504
Provision for
Income Taxes 11,645,552 7,558,271 16,909,189 35,734,452
------------- -------------- ------------- -------------
Net Income $ 23,936,854 $ 15,146,556 $ 34,589,230 $ 72,453,052
============= ============== ============= =============
Earnings Per
Share
Basic $ 0.17 $ 0.11 $ 0.25 $ 0.51
Diluted $ 0.17 $ 0.11 $ 0.25 $ 0.51
Weighted
Average
Shares:
Basic 137,216,748 140,233,348 137,163,501 141,913,581
Diluted 137,710,858 140,443,652 137,546,710 142,214,993
Cash Dividends
Declared per
Share $ 0.11 $ 0.11 $ 0.33 $ 0.32
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Sept 30, Dec 31,
2009 2008
---------------- ----------------
ASSETS
Cash and Short-Term Investments $ 350,000,334 $ 323,483,785
Other Current Assets 144,999,032 133,668,174
---------------- ----------------
Total Current Assets 494,999,366 457,151,959
Plant and Equipment - Net 202,454,289 214,951,719
Long-Term Investments and Other Assets 103,231,920 90,999,702
---------------- ----------------
Total Assets $ 800,685,575 $ 763,103,380
================ ================
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $ 73,408,158 $ 49,472,438
Long-Term Debt 0 0
Deferred Income Taxes 18,514,914 15,034,620
Shareholders' Investment 708,762,503 698,596,322
---------------- ----------------
Total Liabilities & Shareholders'
Investment $ 800,685,575 $ 763,103,380
================ ================
AUTO-DIMMING MIRROR UNIT SHIPMENTS
(Thousands)
Third Nine Months
Quarter Ended Ended
September 30, September 30,
----------------- -----------------
2009 2008 % Change 2009 2008 % Change
-------- -------- ------- -------- -------- -------
Domestic Interior 896 946 -5% 2,041 3,264 -37%
-------- -------- ------- -------- -------- -------
Domestic Exterior 263 258 2% 602 1,061 -43%
-------- -------- ------- -------- -------- -------
Total Domestic Units 1,159 1,204 -4% 2,643 4,325 -39%
-------- -------- ------- -------- -------- -------
-------- -------- ------- -------- -------- -------
Foreign Interior 1,554 1,695 -8% 3,860 5,213 -26%
-------- -------- ------- -------- -------- -------
Foreign Exterior 584 629 -7% 1,498 2,055 -27%
-------- -------- ------- -------- -------- -------
Total Foreign Units 2,139 2,324 -8% 5,357 7,268 -26%
-------- -------- ------- -------- -------- -------
-------- -------- ------- -------- -------- -------
Total Interior
Mirrors 2,450 2,641 -7% 5,900 8,477 -30%
-------- -------- ------- -------- -------- -------
Total Exterior
Mirrors 847 887 -5% 2,100 3,116 -33%
-------- -------- ------- -------- -------- -------
Total Mirror Units 3,297 3,528 -7% 8,000 11,593 -31%
-------- -------- ------- -------- -------- -------
Note: Certain prior year amounts have been reclassified to conform with the
current year presentation. Percent change and amounts may not total due to
rounding.
Contact Information: CONTACT:
Connie Hamblin
(616) 772-1800